WILL THE DAWN of a new century be accompanied by the birth of radical new perks
for IT professionals or a leveling off of compensation as the stock market stumbles?

And how will trends such as the increasing use of telecommuting and the elimination
of middle management affect IT professionals' careers?

It depends on whom you ask.

Some industry observers believe rising IT compensation may force companies to offer
novel forms of noncash compensation to retain workers.

James Canton, president of the San Francisco-based consultancy Institute for Global
Futures and author of the book Technofutures, sees IT workers as having the leverage to
demand even more money and perks from employers in the future. Among the likely perks:
demanding where you want to live and in what country you will be paid.

"Today there is a big shortage of IT talent, and I see that increasing dramatically
in the next three to five years, so that competition for IT talent becomes even more
fierce," Canton says. "That means IT folks will be paid more, will get more stock, and
will have a lot more advantages in terms of lifestyle and work style."

For example, in order to retain workers, management may be forced to let them
operate their own small companies on the side, or to offer them perks "like allowing
them to live next year in Singapore or Italy, or giving them an opportunity to learn
about sales and marketing even though they are working in IT," Canton says. Workers
also might be able to demand that they be paid in a country that has no taxes or be
paid barter-style, with company resources such as supercomputing power that can be used
for an employee's personal business projects.

CREATIVE INCENTIVES

Others are betting on more mundane noncash incentives. IT will move away from
throwing money at people and will concentrate on creating an engaging workplace with
personalized financial rewards, according to Jay Schuster and Patricia Zingheim,
partners at the Los Angeles-based compensation consulting company Schuster Zingheim and
Associates, as well as co-authors of the books The New Pay and Pay People Right.

"You'll see more project and team incentives that have more to do with what
employees directly affect in IT. It's much more meaningful than the same amount of
money based on company performance," Zingheim says.

But some observers believe that IT pay won't continue to go up indefinitely.

"The equity markets have been strong for a number of years, and that's been driving
up management compensation levels in IT," says Jeff Leon, managing director of the
information officers practice at Russell Reynolds Associates, an executive search
company in New York. "But the boom in the equity markets won't last, particularly for
the dot-coms. At some point, those stock values will have to deflate, and that will
throw some water on the fire of rising compensation."

MANAGEMENT CHALLENGES

IT manageers can expect to be forced to deal with more alternative work styles in
the future, including telecommuting, says Fred Niederman, Shaughnessy Associate
Professor of MIS at Saint Louis University, in St. Louis, and chair of the Association
for Computing Machinery's special interest group on computer personnel research.

"While workers who are telecommuting sometimes feel as if they are out of the loop
at work, telecommuting is likely to be more stressful for IT managers than it is for
workers," Niederman says. "If you are an IT manager and you have 20 percent of your
staff working at home for three to five days a week, how do you know they've done their
jobs? And how do you break their work into pieces so people can work at home part of
the time and get a piece of a project done? How are you going to arrange to get them
into a meeting to make sure they are all on the same page? Also, how are you going to
make sure the IT person who is working at home has the opportunity to grow and
develop?"

SLIMMING DOWN

Another management change on the horizon is that companies may continue to remove
layers of management in their IT departments to save money. But not all companies will
do that because of the perceived risk, Niederman says.

The theory of removing management layers is sound enough; technologies such as e-
mail and databases have consolidated scattered pieces of information and thus enabled
managers to have a broader span of control within the corporation, Niederman says. In
practical terms, this means that managers whose primary job was to consolidate
information from lower in the organization and present it to the next level of
management won't be needed any longer, he says.

The trouble is that some companies that have reduced the levels of management have
found out that those people were performing other valuable tasks, such as mentoring and
initiating new projects, Niederman says.

"Some companies that have reduced levels of management have gotten big gaps in the
organization. So the results have been mixed," Niederman says. "What will happen is
that some firms will say the success rate has been fifty-fifty, and that's too much
risk. But other companies will say they've got to do it anyway to save money."

Michael Nieset, executive director of the CEO and board practice at search company
Christian & Timbers, in Cleveland, is betting that more IT departments will remove
layers of management in the future.

"Technology will continue to push the effectiveness of managers to manage larger
groups of people and larger projects. We don't know where it will end," Nieset says.

The bottom line, of course, is that no one can be sure how IT compensation and
management structures will change. But no one is predicting that they will stay the
same.

This story, "Experts foresee changes in compensation and management" was originally published by
InfoWorld.

Steve Alexander is Ciena’s Senior Vice President and Chief Technology Officer. He is an IEEE Fellow and was the recipient of the IEEE Communications Society Industrial Innovation Award in 2012. He has more than 20 years of telecom experience.